The predetermined overhead rate is based on total quizlet

If there are no significant changes, the Predetermined Overhead Rate will be kept for use in the following year. The rate is calculated based on the assumption and mostly there is small material that we could not avoid. The concept of calculation Predetermined Overhead Rate is by using the expected total overhead that hoping to incur for the ... The predetermined overhead rate is calculated by simply dividing the estimated overhead expense by the estimated activity base. For example, if overhead expenses are estimated to be $5 million for a particular period and the activity cost of a manufacturing project over that period amounts to $20 million, the predetermined overhead rate would be 1-to-4, meaning that for every dollar spent on ...

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Jun 07, 2011 · a company uses a predetermined overhead rate based on machine hours to apply manufacturing overhead to jobs. the company has provided the following estimated cost for next year: direct materials...

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(Predetermined Overhead Rate) For 2013, Omaha Mechanical has a monthly overhead cost formula of $42,900 + $6 per direct labor hour. The firm’s 2013 expected annual capacity is $78,000 direct labor hours, to be incurred evenly each month. Making one unit of the company product requires 1.5 direct labor hours. a. The Goods in Process Inventory account of a manufacturing company that uses an overhead rate based on direct labor cost has a $7,750 debit balance after all posting is completed. The cost sheet of the one job still in process shows direct material cost of $6,000 and direct labor cost of $1,000. Bernson Corporation is using a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of $492,000 and 30,000 machine-hours for the period.The company incurred actual total fixed manufacturing overhead of $517,000 and 28,300 total machine-hours during the period.


A pre-determined overhead rate is the rate used to apply manufacturing overhead to work-in-process inventory. The pre-determined overhead rate is calculated before the period begins. The first step is to estimate the amount of the activity base that will be required to support operations in the upcoming period. The second step is to estimate the total manufacturing cost at that level of ...

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